South Korea Logs First Rise in Exports in 13 Months; Manufacturing Activity Remains in Contraction
South Korea’s exports have seen a positive turnaround after 13 consecutive months of decline. In October, the country recorded a 5.1% year-on-year increase in exports, marking the first expansion since September 2022. This comes as a reversal from the 4.4% drop witnessed in September.
Despite this positive development, South Korea’s manufacturing sector continues to face challenges. Manufacturing activity remained in contraction mode, with the purchasing managers index (PMI) coming in at 49.8 in October, slightly lower than September’s 49.9.
The strengthening of South Korea’s export sector can be attributed to various factors, including the global economic recovery and increased demand for South Korean goods. However, the contraction in manufacturing activity raises concerns about the overall health of the country’s economy.
Meanwhile, Japan’s yen has hit over one-year lows against the U.S. dollar. The currency weakened by 0.25%, surpassing the 150 per dollar threshold to trade at 151.29. This marks the lowest level since late October 2022. The depreciation of the yen follows the Bank of Japan’s decision to maintain interest rates and adopt a more flexible yield curve control policy.
In China, manufacturing activity unexpectedly contracted in October, according to a private survey. The Caixin/S&P Global manufacturing PMI fell to 49.5, signaling a contraction for the first time in four months. Economists had anticipated a reading of 50.8.
The Chinese survey aligns with the official figures released by the country’s national bureau of statistics, confirming a slowdown in manufacturing activity.
On a more positive note, Japan’s markets experienced a significant boost, with the Nikkei 225 rising by 2.05%. This surge in stock market performance comes after the Bank of Japan announced greater flexibility in its yield curve control policy.
In a separate report, the China Beige Book noted that Chinese consumers have become increasingly cautious. This cautious approach is reflected in reduced discretionary spending and a focus on essential items. The shift in consumer behavior highlights the challenges faced by various industries, particularly luxury brands.
Despite concerns expressed by some analysts, Chinese policymakers remain confident about achieving their 5% growth target for the year. Therefore, there is currently no plan to introduce additional stimulus measures that could drive consumer spending.
Finally, it is worth noting that October was a challenging month for Wall Street, as the major stock indices recorded a three-month losing streak. This marked the longest monthly slide for the Dow and S&P 500 since the first quarter of 2020.
Overall, global markets continue to navigate uncertain economic conditions, with some regions experiencing fluctuations in exports, manufacturing activity, and consumer spending. Analysts will closely monitor these trends to assess the potential impact on the global economy.